Retail trade group says holiday sales could increase as much as 5.2% this year despite the pandemic thanks to a boom in online shopping

• The National Retail Federation, a trade group, said Monday that it's expecting holiday sales to grow by up to 5.2% over 2019.
• The pandemic-fueled boom in e-commerce will be a massive boon to holiday sales, with non-store sales climbing by 20% to 30% this year by the NRF's estimates.
• The organization cites rising home prices, record personal savings, and a strong stock market as factors that could increase spending throughout November and December.

Retailers may closeout 2020 with a bang even as the ongoing pandemic batters small stores and keeps shoppers out of brick-and-mortar locations, according to a new holiday sales forecast from a retail trade group.

The National Retail Federation announced Monday that it projects November and December holiday sales to jump 3.6% to 5.2%, as compared with the same period last year. The organization expects total holiday sales in the neighborhood of $755.3 billion to $766.7 billion, excluding car dealers, gas stations, and restaurants.

The NRF said it takes into account factors including wages, employment, previous retail sales, weather, disposable income, and consumer credit when making predictions about the upcoming holiday season. According to its model, a strong stock market, record personal savings, and rising home values may all boost retail spending, while a drop in spending on travel, entertainment, and other services severely impacted by the pandemic pads peoples' disposable income.

"Given the pandemic, there is uncertainty about consumers' willingness to spend, but with the economy improving most have the ability to spend," said Jack Kleinhenz, NRF's chief economist, in a statement. "Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago."

Read more: Walmart announces three new sales events, as it looks to stretch Black Friday through November and hedge against an uncertain holiday season

Holiday sales in 2020 will also get a major lift from e-commerce, which has seen an unprecedented boom during the pandemic. Online sales saw a nearly 37% year-over-year growth in the third quarter, according to the NRF, and the organization expects shoppers will continue to rely on online shopping throughout the holidays.

It forecasts that online and other non-store sales will jump by 20% to 30% over 2019, to a total of between $202.5 billion and $218.4 billion.

Overall holiday sales grew 4% in 2019, and an average of 3.5% over the last five holiday seasons.

The optimistic forecast comes as retailers enter a holiday shopping season that's set to be more spread out than in years past. Many companies — including Walmart — are encouraging online shopping and spreading deals out over days and weeks in an effort to prevent overcrowding in stores.